SBP’s MPC to meet today to decide on key policy rate

The State Bank of Pakistan (SBP) is expected to announce its new monetary policy today (Monday), as Islamabad grapples with a rise in international oil prices due to the US-Iran war.

The Monetary Policy Committee (MPC) will meet for the fourth time this year.

In the previous MPC meeting held on Apr 27, 2026, the central bank raised the policy rate by 100bps, increasing it to 11.5%, in line with market expectations.

Market experts showed mixed expectations regarding the central bank decision.

Topline Securities expected interest rates to remain unchanged.

In a poll conducted by Topline Securities, 49% of respondents expect the policy rate to remain unchanged on Jun 15, 2026, MPC meeting. Meanwhile, the remaining 49% anticipate an increase, with 34% expecting a 50bps hike and 15% forecasting a 100bps hike. While 2% expect a decline of up to 50bps.

“The uncertainty/mix view over rate change expectations is primarily driven by high volatility in oil prices. Our view of the status quo is backed by efforts/steps taken by involving parties in the war and active mediation by Pakistan,” said the brokerage house.

Meanwhile, Pakistan Institute of Development Economics (PIDE) noted that market expectations are broadly aligned with a cautious hold.

“Recent commentary suggests that, while views remain divided between status quo and a modest hike, easing oil-price and geopolitical pressures have reduced the probability of another increase, whereas still-elevated inflation and expectation risks make a rate cut premature,” it added.

The United States and Iran reached a deal to end their war and will hold an official signing ceremony on Friday in Switzerland, Pakistani Prime Minister Shehbaz Sharif said on social media early on Monday.

The precise terms of the deal were not immediately known. Sharif said the pact called for “the immediate and permanent termination of military operations on all fronts, including in Lebanon”.

More to follow